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Sachin Bansal On Navi’s Digital Banking Ambitions, Changing The Fintech Status Quo

Sachin Bansal On Navi’s Digital Banking Ambitions, Changing The Fintech Status Quo

Bansal's Navi Technologies will be looking at full-fledged financial services in the near future

Bansal-owned Chaitanya India Fin Credit applied for a banking licence earlier this year

The Flipkart cofounder said the digital bank would need to focus on profitability quickly due to regulations

After the success of Flipkart and exiting the company ahead of the Walmart acquisition, Sachin Bansal is clearly focussed on the fintech sector now. Bansal will be leading the charge towards digital banking with Navi Technologies, which was launched in December 2018 by Bansal and Ankit Agarwal as BAC Acquisitions.

Navi Technologies completed the acquisition of non-banking finance company (NBFC) Chaitanya Rural Intermediation Development Services Private Limited (CRIDS) in September 2019 and Bansal took over as the CEO of the company. CRIDS, which runs Chaitanya India Fin Credit (CIFCPL), provides the underbanked audience in rural areas access to the credit market through loans for two-wheelers, housing, small business and education.

Bansal is said to have poured in over $450 Mn into Navi. The company also acquired Mumbai-based insurance company DHFL General Insurance from Kapil Wadhawan-led financial services group Wadhawan Group Capital (WGC) for INR 100 Cr ($14 Mn).

The acquisition of CRIDS by Navi saw an investment of INR 739 Cr ($104 Mn) by Bansal and his entry into financial services. Bansal had said that the fact that CRIDS provides financial access to people who don’t have access to other formal finance impressed him the most.

And carrying forward this vision, Navi is now looking at disrupting the banking sector. “Regulators understand that existing players may not be able to solve problems and they need new players coming in,” Bansal told TOI in an interview.

In January, CIFCPL submitted an application to the Reserve Bank of India (RBI) for a universal bank license. The license is sought to increase financialisation by making banking simple, accessible and affordable via a consumer-centric and technology-driven approach.

“If you look at building HDFC Bank from scratch with today’s technology and capabilities, it will look very different,” Bansal was quoted as saying. He added that Navi would become an umbrella fintech business providing all kinds of services.

According to BAC Acquisitions’ regulatory filings of January 2019 accessed by Inc42, the company wants to acquire, maintain, develop and make available tech-driven products for providing services for data processing, data entry, customer relationship management, communications, data analysis, social, gaming, design, cloud computing and other services.

“Financial services is not a winner-takes-all business, and regulators are very strong. We need to grow fast but start achieving balanced growth and profitability early, as the confidence of regulators will not be high if you are not profitable,” the Flipkart cofounder said.

While so far Navi has seen Sachin Bansal and Ankit Agarwal investing themselves, the International Finance Corporation (IFC) is looking to invest $30 Mn for a 4.5% stake in Navi Technologies. According to an IFC disclosure notice, the transaction values the new venture at around $650 Mn (INR 2100 Cr).